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JLeslie's avatar

Is Warren right to want to break up companies like Amazon and Google, or is Yang right that we should just tax them?

Asked by JLeslie (57915points) 1 month ago from iPhone

Are monopolies something we should accept if it provides a good service? Or, is it too dangerous to allow one company so much power? Could we just regulate it?

Where do you stand on the topic?

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8 Answers

gorillapaws's avatar

Break them up. Monopolies are in opposition to competition—which is the mechanism that makes Capitalism effective. A healthy market has many strong competitors in the marketplace that are innovating and competing on price, features, and service. You don’t see this with monopolies, or oligopolies.

Imagine the extreme case where you had one company “Wal-ooglezon” that literally owned everything. Everyone was an employee and it was the only option for buying goods and services. That would actually be worse than full-blown Maoist Communism (which itself is terrible) because there would be no government checks/balances on that company.

elbanditoroso's avatar

Breaking up the companies is sheer idiocy. It really doesn’t change much, even if they do it. Supposed they broke Amazon into five pieces. They’re each going to be 80% owned by Bezos, because he owns the lions share of the stock. And what’s to stop each of them from monopolizing their own particular product area?

The only way to have a breakup of these companies is to confiscate the owners’ wealth. And that is pure communism.

Tax and regulate – that’s the right approach.

gorillapaws's avatar

@elbanditoroso “They’re each going to be 80% owned by Bezos”

Bezos owns 12% of Amazon.

5 separate baby Amazons would compete with each other and wouldn’t have the buying power to gobble up other competitors via acquisition or using their marketshare to push them out.

elbanditoroso's avatar

@gorillapaws

OK 12%, he would still be the largest shareowner. He can still tell the company what to do.

You’re making the assumption that the baby Amazons would all be competing with each other. I doubt that. If I were splitting the company up, I would do it this way:

Separate companies

- Amazon web services
– Amazon transportation and delivery
– Amazon books and DVDs and streaming content
– Amazon drugs and healthcare
– Amazon retail goods (all the other stuff they sell)

Each one of these could be dominant in its field (except transportation). So what have you accomplished? You would have four monopoly markets instead of one.

Or are you telling me that the government should tell a corporation how to restructure its business?

gorillapaws's avatar

@elbanditoroso “Or are you telling me that the government should tell a corporation how to restructure its business?”

When those corporations are in violation of anti-competition legislation, absolutely. It’s the responsibility of the government to promote fair and competitive marketplaces.

“So what have you accomplished?”

You’ve created less powerful companies. For example they will have a harder time using their position to lobby for massive tax deals when building their headquarters. That means smaller competitors will have a better chance at scrapping with them on price. They can’t leverage their transportation advantages to beat out smaller competitors, or their credit card to lock in repeat business.

mazingerz88's avatar

Break them up.

Zaku's avatar

I think that if “corporations are people” then they should be held accountable and be punishable like people.

I think that corporations that do harm should be reorganized so that they stop doing harm and don’t keep looking for more ways to profit that include doing harm. That could mean breaking them up, but it might also/instead mean changing their leadership and their corporate charter and rules.

If you just fine and tax enormous for-profit corporations, unless you make them entirely responsible for truly undoing all of the damage they do (so probably a lot more than the damage they were technically convicted of) then they’ll just continue to do profit/loss estimates and act to do what makes them the most profit, or possibly just the most short-term profit while people bail the money out of that corporate identity before the penalties hit. (But so far, most megacorporations, even when they do get punished for major damage they do, then to get punished far less than they did damage, and their charters aren’t changed, so they keep doing whatever they think will make them the most profits.)

Sagacious's avatar

The reason for the government to be interested in breaking up companies is for the sake of competition. So, if all the government is interested in is taxing, then leave them alone. I would hope the government would see the wisdom of preventing monopolies other than those regulated for the common good, such as the utilities used to be. This is one of the way to encourage competition in the market.

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